The Federal Health Insurance Law Remains Vulnerable

Last week, Pennsylvania became the 24th state to opt out of a state-funded health insurance exchange, declining to foot the bill for overreaching federal policies. One by one, states are learning that state-funded exchanges–which come with hefty price tags but zero flexibility–are a bad deal.

Although the Supreme Court last summer characterized the penalty for Americans who do not purchase government-sanctioned health insurance as a tax, it may be an unconstitutional tax. That’s because the Constitution requires all “bills for raising revenue” to “originate in the House.” By restricting tax bills to the branch of Congress closest to the people, the House of Representatives, the Framers intended to safeguard the people from this potentially dangerous power. But the federal health insurance law originated in the Senate–not the House–in direct violation of the Origination Clause. The Pacific Legal Foundation is leading this challenge in federal district court in Washington, D.C.

Pruitt v. Sebelius

Oklahoma is one of the states that has declined to establish a state-funded health insurance exchange, shielding its citizens and employers from hefty fines and blocking massive taxpayer subsidies to private insurance companies. But as more and more states opt out of exchanges, it is becoming clear that the feds will bear the burden of funding and enforcing the federal mandates. In response, the IRS is attempting to unlawfully tax Oklahomans to pay for a federal exchange in that state. But the federal health insurance law is clear: states that choose not to fund exchanges can exempt their citizens from those financial burdens. The IRS cannot exceed the powers granted to it by Congress and impose illegal taxes on states that opt out. Oklahoma’s lawsuit is pending in federal district court in Oklahoma.

Liberty University v. Geithner

Liberty University, a Christian college, contends that the federal health insurance law’s requirements that individuals obtain–and employers provide–government-sanctioned health insurance violate the Constitution’s Free Exercise and Establishment clauses, which protect freedom of religion. Specifically, the lawsuit challenges the law’s mandatory coverage of contraceptives and forced funding of abortions. After lying dormant due to this summer’s decision on the individual mandate, the Supreme Court has given Liberty University the green light to proceed with its lawsuit. That case is now in front of the Fourth Circuit Court of Appeals.

Needless to say, court decisions over the next few years will be critical in determining the fate of health care freedom, limited government, and state sovereignty. The Goldwater Institute will keep you updated along the way–stay tuned!